HomeMy WebLinkAboutMin - CC - 2018.10.15
Burlingame City Council October 15, 2018
Approved Minutes
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BURLINGAME CITY COUNCIL
Approved Minutes
Regular Meeting on October 15, 2018
1. CALL TO ORDER
A duly noticed regular meeting of the Burlingame City Council was held on the above date in the City Hall
Council Chambers.
2. PLEDGE OF ALLEGIANCE TO THE FLAG
The pledge of allegiance was led by former Mayor Jerry Deal.
3. ROLL CALL
MEMBERS PRESENT: Beach, Brownrigg, Colson, Keighran, Ortiz,
MEMBERS ABSENT: None
4. CLOSED SESSION
a. CONFERENCE WITH LABOR NEGOTIATORS (GOV. CODE SECTION 54957.6) CITY
DESIGNATED REPRESENTATIVES: TIMOTHY L. DAVIS, SONYA M. MORRISON,
KATHLEEN KANE, CAROL AUGUSTINE, AND LISA K. GOLDMAN EMPLOYEE
ORGANIZATIONS: BURLINGAME POLICE OFFICERS ASSOCIATION, BURLINGAME
POLICE SERGEANTS ASSOCIATION, AND ASSOCIATION OF POLICE
ADMINISTRATORS
City Attorney Kane reported that direction was given but no reportable action was taken.
5. UPCOMING EVENTS
Mayor Brownrigg reviewed the upcoming events taking place in the city.
6. PRESENTATIONS
a. PRESENTATION TO HYATT REGENCY SAN FRANCISCO AIRPORT CELEBRATING
ITS 30TH ANNIVERSARY IN BURLINGAME
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Mayor Brownrigg congratulated Hyatt Regency San Francisco Airport on their thirtieth anniversary in
Burlingame and presented their General Manager Irby Morvant with a proclamation.
7. PUBLIC COMMENT
Burlingame resident Sandra Lang discussed the Burlingame Neighborhood Network event that occurred on
October 13, 2018.
8. CONSENT CALENDAR
Mayor Brownrigg asked the Councilmembers and the public if they wished to remove any item from the
Consent Calendar. Councilmember Keighran pulled 8e.
Councilmember Beach made a motion to approve 8a, 8b, 8c and 8d; seconded by Councilmember Ortiz. The
motion passed unanimously by voice vote, 5-0.
a. ADOPTION OF CITY COUNCIL MEETING MINUTES OCTOBER 1, 2018
City Clerk Hassel-Shearer requested Council adopt the City Council Meeting Minutes of October 1, 2018.
b. ADOPTION OF A RESOLUTION CANCELLING THE PROCUREMENT OF FIVE
PUBLIC SAFETY VEHICLES FOR THE POLICE DEPARTMENT
DPW Murtuza requested Council adopt Resolution Number 133-2018.
c. ADOPTION OF A RESOLUTION APPROVING THE UPDATED SANITARY SEWER
MANAGEMENT PLAN
DPW Murtuza requested Council adopt Resolution Number 134-2018.
d. ADOPTION OF A RESOLUTION APPROVING THE FINAL PARCEL MAP (PM 17-01),
LOT MERGER OF PORTIONS OF LOT 3, BLOCK 5, MAP OF BURLIGNAME LAND
COMPANY NO. 2 SUBDIVISION AT 1128 AND 1132 DOUGLAS AVENUE
CDD Gardiner requested Council adopt Resolution Number 135-2018.
e. ADOPTION OF A RESOLUTION APPROVING THE CITY OF BURLINGAME RESPONSE
LETTER TO THE 2017-2018 SAN MATEO COUNTY CIVIL GRAND JURY REPORT:
“SMOKE-FREE MULTITENANT HOUSE: NO IFS, ANDS OR BUTTS.”
City Attorney Kane requested Council adopt Resolution Number 136-2018.
Councilmember Keighran asked if the City’s ordinance covered non-medical cannabis. City Attorney Kane
stated that when the City passed a multi-unit housing smoking ban ordinance, non-medical cannabis was not
legal in California. She explained that the ordinance banned all combustion-based smoking except for
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something that is required by a medical prescription. Therefore, her reading of the ordinance is that it would
ban recreational cannabis smoking. She noted that the Council should revisit this issue at a later time.
Councilmember Keighran stated that pursuant to the grand jury report, San Mateo County residents who
have received citations were unaware of existing non-smoking ordinances in apartment buildings. However,
in Burlingame, the public was aware of the City’s multi-unit housing smoking ban. She asked how many
citations have been issued in Burlingame. City Attorney Kane stated that she didn’t know the exact number.
She added that the City’s Code Enforcement Officer conducted extensive public outreach to apartment
managers, owners, and residents about the multi-unit housing smoking ban.
Vice Mayor Colson asked if people could anonymously report violations. City Attorney Kane replied in the
affirmative.
Mayor Brownrigg discussed the County movement to talk about flavored tobacco. City Manager Goldman
stated that staff is proposing having this discussion in January.
Mayor Brownrigg opened the item up for public comment. No one spoke.
Councilmember Keighran made a motion to adopt Resolution Number 136-2018; seconded by
Councilmember Ortiz. The motion passed unanimously by voice vote.
9. PUBLIC HEARINGS
There were no public hearings.
10. STAFF REPORTS AND COMMUNICATIONS
a. DISCUSSION OF BURLINGAME AQUATIC CENTER POOL RENOVATION
BURLINGAME
City Manager Goldman discussed the City’s agreement with the San Mateo Union High School District
(“District”) concerning maintenance and use of the Burlingame Aquatic Center (“BAC”) pool. She
explained that in 1997, the City and the District entered into an agreement to jointly fund the construction
and ongoing repair, improvements, and operations of a new 25-yard pool at Burlingame High School. A few
years later, an anonymous donor gave $1.2 million to upgrade the 25-yard pool facility into a 50-meter pool.
The City contributed $1.167 million and the District contributed $300,000 to upgrade the pool. After the
pool was upgraded, the City and District amended their agreement to expand the hours that the facility could
be open and made other changes.
City Manager Goldman stated that between the time the pool opened and 2011, the City operated the
community programs at the pool, including recreational swimming, lap swimming, swim lessons, and fitness
classes, and managed the scheduling. In 2011, the City contracted with BAC to operate these programs on
the City’s behalf. BAC was already managing competitive programs in adult and youth swimming and water
polo at the pool.
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In 2016, the City and the District approved a new pool agreement. The new agreement extended the term by
three years to January 1, 2026, covered how maintenance and operating expenses would be split between the
two parties (the City pays 78%, while the District pays 22%), and how capital expenses are spilt (50-50
basis). The agreement also covered when the City has exclusive use of the pool, when the pool is shared
with the District, and when the pool can be closed for annual maintenance.
City Manager Goldman explained that prior to signing the agreement, the District commissioned a facility
audit of the aquatic center. The intent of the audit was to help the City and District jointly develop a capital
replacement program. The audit listed projects that needed to be undertaken within five years and within ten
years. She noted that under the five-year timeframe, the City and District would need to remove and replace
the pool deck and drainage, and remove and replace the pool finish in the competition pool.
City Manager Goldman explained that earlier this year, the District began undertaking renovations to the
aquatic center; the project included removal and replacement of the deck, removal and replacement of the
pool finish, and the replacement of the interior lights with LED fixtures. She stated that the project was to
begin on June 1 and be completed by September 21. The expected budget for the project was $1,902,659,
with the City’s share at $951,330. Due to a variety of factors, including the need to re-bid the project and
delays getting approvals from the Department of the State Architect, which approves school construction
projects, demolition of the deck didn’t begin until July 2.
City Manager Goldman stated that in July, District staff notified the City that the pool shell contained
problems related to rebar and waterproofing, and that there were additional problems with the light fixtures
and electrical work. She explained that the cost to make the repairs to the electrical exceeded the Public
Contract Code limits that the District is required to follow. Therefore, the repair work needed to be formally
bid, which delayed progress on the pool.
City Manager Goldman explained that in August, the contractor uncovered additional problems with
corrosion of the rebar at various locations, such as the lights, stairs, and floor inlets, and improper concrete
coverage in many areas. As a result of these issues, in September, the District requested that its pool
engineer produce an existing conditions report that highlighted the various challenges with the pool. The
report states that the pool shell is compromised and should be replaced, rather than repaired. She noted that
the City has not seen this report.
City Manager Goldman explained that City staff and District staff met on September 28 to discuss options
for moving forward. She noted that included in the packet is the District’s PowerPoint presentation that the
District gave to their Board at their October 11 meeting. She stated that at the October 11 District meeting,
District staff presented two options to the Board. The first option is to repair the problems that have been
identified. She explained the pool engineer believes that under this option, the pool is likely to require major
maintenance at some point in the future that will necessitate draining the pool and keeping it closed for
several months at a time. Additionally at the end of the ten to fifteen years, the pool will need to be replaced.
The total cost to repair the pool shell, and additional projects will be $2,538,406. The City would be
responsible for 50% of the costs, and the pool is estimated to reopen March 2019.
City Manager Goldman stated that the second option involves completely reconstructing the pool shell.
She noted that the District staff is leaning towards this option. The scope of this option is outlined on page
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21 of the District’s presentation. She stated that this option is estimated to cost $5 million and won’t be
completed until December 2019. She explained that the District believes that under this option, the pool
shell life will be extended to fifty years and there will be fewer shutdowns in the future.
City Manager Goldman stated that District staff feels that option 2 is more financially responsible. The
District staff recommended that the City’s cost be capped at the amount they would pay under the first
option: $1,269,203. This recommendation was presented to the District Board, but they didn’t make a
decision at their October 15 meeting. She explained that the District Board is bringing the matter back on
October 25.
City Manager Goldman thanked the District staff for working with BAC to ensure that the student teams
have places and times to practice. However, she noted that this will become more difficult when swimming
starts at the high schools in the spring.
City Manager Goldman noted that the District may ask the City to contribute more if they decide to replace
the pool. She discussed the current agreement and stated that it doesn’t require the City to pay for replacing
the pool.
Councilmember Ortiz asked if there was any recourse to the contractor or the project manager of the original
pool upgrade. City Manager Goldman stated that the contractor is out of business.
Vice Mayor Colson asked if the facility audit of the pool included the bathroom facilities and if the same
contractor was used. City Manager Goldman stated that she was unsure and would get back to the Council
with this information.
Vice Mayor Colson asked if there was insurance on the pool. City Manager Goldman stated that she didn’t
know.
Mayor Brownrigg opened the item up for public comment.
Millbrae resident and BAC Masters swimmer Simon Greenwood stated his concern that the pool’s issues
might cause the community to lose some of the excellent staff at BAC.
A Burlingame parent discussed the impact of the closure of the pool on students in the community and how it
was causing stress on families.
Vice Mayor Colson asked if the parents had a suggestion for what the City could do to help out. The
Burlingame parent stated that she wanted the City to voice what the community is losing if the pool is closed
for an extended period of time.
Vice Mayor Colson asked if the parent’s preference would be to go with option one or two. The Burlingame
parent replied option one and added that it would give the community time to raise funds to build a new pool.
Mayor Brownrigg stated that he was concerned that if the District went with the first option, there was a
chance that additional repairs would be need and the pool would continue to close. City Manager Goldman
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added that the challenge with option 1 is the unknown of how long the repairs will last and whether the pool
will need continuous repairs over the next ten to 15 years.
Burlingame resident Sally stated that she wanted to see BAC attract good coaches that will stick around and
that she didn’t believe it could be done without replacing the pool.
Burlingame resident Meredith discussed the importance of the pool in the community and how it might be
better to build a new pool on City property.
Mayor Brownrigg closed public comment.
Councilmember Beach asked when the District’s next discussion on this matter would be. City Manager
Goldman stated that the District scheduled a study session for October 25.
Councilmember Keighran stated that the first option is a band aid. She stated that if it doesn’t work and the
pool has to continuously undergo repairs, then costs will increase. She explained that depending on what the
District’s Board decides, the City might need to look at how to assist in transporting students to other pools
and ensuring that they have access to pools.
Councilmember Ortiz stated that he favored option 2, as he was concerned that repairing the pool would not
solve the problem.
Vice Mayor Colson asked when the current contract ends. City Manager Goldman replied 2026.
Vice Mayor Colson stated that if the District builds a new pool that lasts 50 years, it will extend beyond the
agreement. City Attorney Kane explained that all of the changes including expanded repairs are outside of
the scope of the agreement. She stated that the City Manager has asked for the engineering reports and that
staff needs to review these documents. She explained that the City wants to ensure that their investment is
buying something that the City can have confidence in. City Manager Goldman added that the Board asked
to hear from the engineers directly and that this might occur at the October 25 meeting. She stated that the
Superintendent is aware of her request for more information.
Vice Mayor Colson stated that the City has looked at building its own recreational pool but the difficulty is
location and costs. She stated that the City should review potential locations and funding sources.
Mayor Brownrigg stated that the pool is a great asset. He explained that he believed that the
recommendation of the District staff to the Board was a fair one and that some of the maintenance issues led
to an acceleration of the structural deficiencies. He stated that he supported the speaker’s suggestion that the
City explore building a pool.
b. CITY COUNCIL DIRECTION REGARDING THE PROPOSAL TO INCREASE THE
PARKING METER TIME LIMITS AND CONSIDER PARKING METER CHANGES ON
BROADWAY BETWEEN EL CAMINO REAL AND CALIFORNIA DRIVE
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DPW Murtuza gave a brief background on the item. He explained that currently, the Broadway commercial
area consists of a total of 285 parking spaces, between on-street parking and five nearby City parking lots.
Of the 285 parking spaces, there are two dozen 24-minute parking spaces, 61 one-hour spaces, 160 two-hour
spaces, and 40 long-term (nine and ten hour) spaces. On Broadway itself, there are 76 spaces total, with 59
one-hour spaces and 17 24-minute spaces. He noted that individuals could also utilize the two hour free
parking in the side street neighborhoods.
DPW Murtuza explained that the Broadway Business Improvement District (“Broadway BID”) recently
requested that the City increase the parking time limits along Broadway from one hour to two hours based on
feedback they received from customers. He noted that if this request was approved, the total supply of two-
hour parking spaces in the Broadway commercial area would increase from 56% to 78%. He added that
while there is a benefit to changing the parking time limits, there are concerns about decreasing the turnover
of parking spaces on Broadway.
DPW Murtuza stated that at the September 13, 2018 TPSC meeting, the Commission discussed the
Broadway BID’s proposal and received public input. He noted that there were an equal number of residents
and merchants in favor of the change as there was against the change. After conducting extensive
deliberations, TSPC voted three to one, with one absence, to recommend converting the 1100 and 1400
blocks of Broadway to two-hour parking limit for a trial period from November 15, 2018 to July 1, 2019. He
explained that if Council agrees with TSPC’s recommendation, this will create 20 two-hour parking spaces
for the pilot program.
DPW Murtuza discussed the difficulty of parking management. He outlined the issues that staff is requesting
direction from Council on:
1. Undertaking a parking study in the Broadway area to determine current supply and demand and
ensure no negative consequences prior to considering changes to the parking limits;
2. Implementation of the two-hour parking limits only on the 1100 and 1400 blocks of Broadway while
retaining the existing parking time limits elsewhere;
3. Consideration of changes to the existing parking meter rate on Broadway from 50 cents per hour to
$1.00 per hour; and
4. Timing of undertaking the parking study and implementation of parking time limit changes given the
significant workload already programmed in the current fiscal year, the existing backlog, and the lack
of funding.
DPW Murtuza explained that in an effort to address some of the concerns raised by the Broadway BID, staff
is installing improved way-finding parking signage on Broadway to better direct drivers to the existing two-
hour parking lots. He stated that staff will work closely with the Broadway BID to monitor the results and
help advise as to any further adjustments needed to the signage.
Mayor Brownrigg noted that the staff report states that 27 people were in favor of keeping one-hour parking,
and 25 people were in favor of two-hour parking. He noted that attached to the staff report was a petition
requesting the spots be two hours. He asked if this was in addition to the numbers reported in the staff
report. DPW Murtuza replied in the affirmative.
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Councilmember Keighran stated that if the side street parking in residential neighborhoods and the long-term
parking spaces are added to the number of two-hour parking spaces, there is a significant amount of two-
hour parking in the Broadway commercial area.
Councilmember Beach stated that parking management is tricky. She asked DPW Murtuza to explain how
changing the parking spaces on Broadway to two-hour would create a reduction in turnover. DPW Murtuza
stated that there are 59 one-hour parking spaces on Broadway, and the maximum capacity these parking
spaces could provide parking for during the day is 590 patrons. If these are made into two-hour spaces, this
becomes 245 patrons. He added that the City doesn’t have the data concerning the current maximum
turnover on Broadway.
Councilmember Beach stated that changing the parking spaces to two-hours could make it feel like there are
fewer available spaces on Broadway. DPW Murtuza replied in the affirmative.
Councilmember Beach stated that after reviewing the resident emails attached to the staff report, the main
take away was the convenience factor of having two-hour parking on Broadway. She asked if staff is
hearing about lack of availability of two-hour spaces. DPW Murtuza replied in the negative.
Councilmember Beach asked about staff’s concerns with TSPC’s recommendation for a pilot program.
DPW Murtuza explained that the City would need to adopt an ordinance for the pilot program and
highlighted potential confusion of having separate blocks with two-hour parking spaces.
Mayor Brownrigg opened the item up for public comment.
Burlingame business owner John Kevranian stated that the Broadway BID is proposing the conversion
because they have received complaints from the public about needing more than an hour to conduct their
business on Broadway.
Councilmember Ortiz asked about parking limits in other commercial areas. Mr. Kevranian stated that
Burlingame Avenue is two hours, Millbrae is free parking, and San Mateo is two hours.
Councilmember Ortiz asked about directing individuals to the parking lots near Broadway. Mr. Kevranian
stated that visitors aren’t able to find the parking lots. He added that all parking lots in Burlingame should
have an address instead of a letter. He explained that this way, people would be able to use their GPS to find
the parking lots.
Mayor Brownrigg closed public comment.
Mayor Brownrigg discussed staff’s concern about the potential confusion the pilot program could create. He
noted that the community is used to having 24-minute meters mixed in with one and two-hour spaces. DPW
Murtuza stated that the 24-minute meters are located near the end of blocks and are color coded.
Mayor Brownrigg suggested color coding different parking spaces. He added that confusion would be
eliminated if the pilot program was done in four connected blocks. DPW Murtuza replied in the affirmative.
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Councilmember Keighran stated that she went to the TSPC meeting to hear the discussion about the
Broadway parking spaces. She explained that she believed the City needed to first conduct a parking study
of the Broadway commercial area prior to making recommendations for a pilot program. She noted that she
doesn’t have trouble finding parking around Broadway and therefore didn’t know this was a problem.
Accordingly, she felt that a study would allow the Council to get a better idea of the situation. She added
that the City needed to address signage for the parking lots in order to ensure that non-residents are able to
find these lots. She asked that maps of the parking lots be put in all the stores.
Mayor Brownrigg asked why the parking on Burlingame Avenue is two-hours and the parking on Broadway
is one-hour. Councilmember Keighran stated that parking studies were done in the Burlingame Avenue
commercial area, and it was found that most of the parking lots were at 92% capacity. Therefore, because
the lots were full, the parking spaces were changed on Burlingame Avenue to two-hour.
Councilmember Beach stated that she agreed with staff and Councilmember Keighran that there was a need
to improve way-finding parking signage for the parking lots near Broadway. She noted that this is not an
issue of supply and demand but rather an issue of convenience. She stated that she was skeptical of the need
to change the parking spaces to two-hour time limits on Broadway as there are plenty of open spots in the
parking lot. She added that the one-hour time limits on Broadway ensure turnover. She added that she
wasn’t in favor of doing a pilot program on a block or two. Rather, she wanted to see a parking study done.
Mayor Brownrigg stated that he was confused at what a parking study would accomplish in this matter.
Councilmember Ortiz stated that a parking study would determine how best to ensure turnover on the main
street and what the need for two-hour parking is in the commercial area.
Councilmember Keighran stated that she could go either way on a parking study. However, because the City
is redoing their General Plan it would be nice to undertake a parking study in this area, as one had not been
done for many years.
Vice Mayor Colson stated that she spent time on Broadway talking to merchants. She explained that it is a
split conversation. She noted that there doesn’t seem to be a lot of data on the matter. She stated that if the
City does a study she would want to include discussion of the installation of EV charging stations in the
parking lots and where optimal places are for these stations. Additionally, she stated that accessBurlingame
shows the locations of parking lots in the Broadway area.
Councilmember Ortiz stated that he believed the City could do a better job at signage for the parking lots but
didn’t want to see the parking time limits change on Broadway without additional information.
Mayor Brownrigg asked that the Police Department provide Council with data on the number of parking
tickets given each year on Broadway. He stated that he was in favor of changing the meters to two hours
because the merchants were voicing support for the change.
Councilmember Ortiz stated the number of merchants on the petition is impressive. Therefore he stated that
he would be in favor of two-hour spaces if the City also adds more 24-minute spaces.
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Councilmember Beach stated that the difference between Burlingame Avenue and Broadway is
traffic/parking management. She stated that Burlingame Avenue is a much bigger area that people shop in.
Broadway doesn’t have a parking issue as there are plenty of spaces in the parking lots. She stated that
although people want to park on Broadway, there are plenty of spots in the nearby lots. She noted that
changing the meters to two-hours, will reduce turnover and therefore further frustrate residents. She added
that a change shouldn’t be made until a study is done in order to understand the unintended consequences of
having two-hour parking spaces on Broadway.
Councilmember Beach stated that if the Council decides to conduct a parking study it should include both
capacity and pricing.
Mayor Brownrigg asked how a study determines turnover. DPW Murtuza explained that the study includes
surveys, interviews with merchants and patrons, and review of data collected from meters. Additionally, the
study determines the average turnover on a given block and the maximum supply versus what actually
occurs.
Mayor Brownrigg stated that he wasn’t in favor of a parking study.
Vice Mayor Colson asked Mr. Kevranian if he would be willing to work with the City on creating maps and
way-finding of parking lots. Mr. Kevranian replied in the affirmative.
Vice Mayor Colson made a motion to move forward with way-finding parking signage and other
improvements to assist individuals in finding the parking lots, and delay a decision on changing the parking
meters on Broadway; seconded by Councilmember Beach.
Councilmember Beach discussed utilizing technology that alerts people of available parking spots. She
stated that the City may want to look into these options.
Councilmember Keighran stated that she believed at some point the City would need to conduct a parking
study on Broadway.
Vice Mayor Colson stated that after these improvements are made, the City could then revisit the matter and
see if at that point a study is needed.
The motion passed unanimously by voice vote, 5-0.
c. ADOPTION OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE
AN AGREEMENT WITH TYLER TECHNOLOGIES, INC. FOR THE MUNIS®
ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM AND IMPLEMENTATION
SERVICES FOR THE CITY OF BURLINGAME
Finance Director Augustine explained that the Finance and Human Resources departments have been
working on purchasing a new finance system for the City.
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Finance Director Augustine explained that staff recommends that the City Council authorize the City
Manager to execute a contract with Tyler Technologies to provide the City with a new Enterprise Resource
Planning system (“ERP”). She noted that last fiscal year, the City hired a consultant to gather input about
what is needed in a new ERP system. The RFP for the system was issued in March, and the City received
three responses. Staff reviewed the responses and chose Tyler Technologies due to the reasons listed on
page two of the staff report.
Finance Director Augustine explained that one of the biggest reasons for selecting Tyler Technologies is due
to the updates deployed over the life of the application with minimal disruption, integrating technological
advances, strategic enhancements, and legislative changes.
Finance Director Augustine stated that staff is close to finalizing negotiations with Tyler Technologies. She
stated that the staff report discusses the implementation stages for the installation of the new system.
Councilmember Keighran stated that according to the staff report, Tyler Technologies has been used by
many cities and asked if any were in the Bay Area. Finance Director Augustine replied in the affirmative.
Mayor Brownrigg asked if this system would handle utility billing. Finance Director Augustine replied in
the affirmative.
Mayor Brownrigg made a motion to adopt Resolution Number 137-2018; seconded by Councilmember
Ortiz. The motion passed unanimously by voice vote, 5-0.
d. UPDATE ON LONG-TERM UNFUNDED POST-EMPLOYMENT LIABILITIES AND
OPTIONS
Finance Director Augustine began by stating that the staff report was an update to a presentation that was
given last year to the City Council and employees about what the reduction in the discount rate was doing to
the CalPERS plan and City costs.
Finance Director Augustine reviewed the pension benefits and OPEB plan. She stated that the details for
both plans are provided for in the employee MOUs. She noted that these plans have seen reductions in their
benefits in recent years. The California Public Employees’ Pension Reform Act of 2013 (“PEPRA”) created
a reduced tier of benefits for new employees. Under this legislation the new formula for miscellaneous
employees is 2% at 62, and for safety employees is 2.7% at 57. She continued by stating that in the area of
medical benefits, a third tier was implemented for employees hired after 2010/2011. This tier replaced all
the defined benefit provisions with a health reimbursement plan beginning after five years of service except
for the CalPERS minimum contribution towards retirees’ medical coverage.
Finance Director Augustine reviewed a bar graph depicting the current fiscal year’s CalPERS contributions
for the different tiers of employees.
Vice Mayor Colson asked if she was correct that PEPRA employees’ CalPERS contribution rates don’t
include an employee pickup share. Finance Director Augustine replied in the affirmative. The employee
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pickup for miscellaneous employees in the 2.5% at 55 tier is 1.5% and the pickup for safety employees in the
3% at 50 tier is 4%.
Vice Mayor Colson stated that the safety employees who are in the 3% at 50 tier created a massive
retirement benefit. She noted that moving the percentage to 2.7% greatly reduced the liability. She asked if
there could be future employee negotiations on the percentage. Finance Director Augustine replied in the
negative, stating that the percentages were set by law.
Mayor Brownrigg asked if he was correct that the City wouldn’t have much unfunded liability for PEPRA
employees. Finance Director Augustine replied in the affirmative.
Mayor Brownrigg asked if CalPERS overestimates their earnings in the future and there is an unfunded
liability, would PEPRA employees be required to do a pickup. Finance Director Augustine replied in the
negative. She noted that the service cost will increase.
Vice Mayor Colson stated some argue that the discount rate jurisdictions should use is the borrowing rate at
which the jurisdiction can borrow money, usually between 4-5%. She explained that this would give
jurisdictions a more realistic view of the risk that is on the table.
Finance Director Augustine stated that the City’s current unfunded pension liability is $63.7 million. She
noted that these numbers are based on the City’s recent actuarial evaluation. She stated that these numbers
include the impact of the discount rate change. She explained that cities are now required to note these
liabilities on their financial statements. As jurisdictions began noting these liabilities, a lot of jurisdictions
showed a negative unrestricted net position. She stated that what the City wants to see is that this number
doesn’t get further negative. Instead, with the changes in the discount rate and the amortization time table,
staff is seeing that the City’s funded ratio is getting a bit smaller in the next few years.
Vice Mayor Colson stated that the City has outstanding pension obligation bonds, and the market value of its
assets is $168.5 million. She noted that this number is subject to the vicissitude of the stock markets and
therefore a number that the City can’t control. She discussed the likelihood of underperformance and noted
that as the market value of assets decreases, the unfunded actuarial accrued liability will automatically
increase. She stated that it is more important to look at the unfunded actuarial accrued liability and the
funded ratio in terms of a trend line.
Finance Director Augustine stated that the discount rate is defined as the assumed rate of return on CalPERS
investments. This was initially established so that 66% of the funding goals would be from investments, and
34% would be from employer/employee contributions. However, this focus has changed. Instead, the focus
is now on a funded status. CalPERS is now trying to invest for a performance that will sustain the fund over
the long term.
Finance Director Augustine reviewed the CalPERS investment returns since 2012. She noted that in 2009,
the rate of return was -24%, which is what escalated the need to take a closer look at the long-term
investment return assumption. She explained that previously, 7.5% seemed reasonable as that had been
achieved. But as a result of the recession, it has changed everyone’s way of thinking.
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Finance Director Augustine reviewed CalPERS’ actuarial changes including
1. Reduction in discount rate (possibly to 6% over 20+ years)
2. New amortization policy
3. Move to more conservative investments
4. Mortality improvements
These changes are all good for the sustainability of the fund, but they all increase employer contribution
rates.
Vice Mayor Colson stated that the new amortization policy shortens the amortization period. She explained
that she is troubled about this because it is putting pressure on schools and absorbing a large chunk of their
excess revenue that came from recent taxes. She stated that she understands why CalPERS would want to do
it, but the City is into the retirement fund for perpetuity. Therefore, when CalPERS reduces the amortization
period, it inordinately squeezes the current group of taxpayers.
Councilmember Beach asked if CalPERS’ discount rate moves closer to 6% does that mean that the City
would need to change its funding strategy for the Section 115 Trust. Finance Director Augustine replied not
necessarily.
Finance Director Augustine reviewed a chart showcasing the impacts of the discount rate reduction. She
stated that it would peak for miscellaneous employees in fiscal year 2027-28 when the employer contribution
rate is projected to be 39.8%. Safety employees will peak in fiscal year 2031-32 when the employer
contribution rate is projected to be 86.3%.
Mayor Brownrigg asked if he was correct that in fiscal year 2027-28, the City’s pension contribution rate
will be 40% of Burlingame’s payroll for miscellaneous employees. Finance Director Augustine replied in
the affirmative and added that this is due to the unfunded liability.
Finance Director Augustine stated that the City will be 100% funded in 2041. At that point, the required
contributions for employers will be approximately the same as they are today. In 2048, the rates will
decrease and will be similar to the rates in fiscal year 2011-12.
Finance Director Augustine stated that all fiscal issues (long term and short term) have to be discussed in the
context of the City’s entire operating budget. In fiscal year 2018-19, revenues are predicted to increase 3.8%
over last year’s revenue. This is not counting Measure I revenues. She noted that operating expenditures are
up 3.7% without including Measure I expenditures. This sum would be 8.7%, if we included the additional
pension funding.
Finance Director Augustine stated that 80% of personnel costs to the City are borne by the General Fund.
She stated that in fiscal year 2017-18, pension costs were 16.5% of personnel costs, and this will increase to
24% in the near future.
Finance Director Augustine stated that at last year’s Budget Study Session, City Council directed staff to
come back with strategies to prefund long term pension obligations. Staff developed a way to smooth the
impact of future rate increases by creating a threshold rate for each miscellaneous and safety plan. Under this
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budget coping strategy, the City would pay CalPERS what is required and would put anything in excess up
to the threshold rate into a Section 115 Trust. Last year, the City established the Section 115 Trust Fund
with an initial $3.7 million contribution. At the previous Mid-Year Budget Study Session, the City Council
voted in favor of contributing an additional $1 million. She explained that the current Section 115 Trust
balance is $8.3 million. This is because the City has already made this year’s contribution of $3.4 million.
She added that staff does not anticipate the need to make a withdrawal from this account until fiscal year
2026-27.
Finance Director Augustine stated that CalPERS includes with their annual evaluation report an alternate
amortization schedule. The schedule shows that over the years, if the City was to have a full fresh start and
pull all of the various tiers of liability into one tier and paid it off over 15 years, the City would achieve
savings of $9.3 million for miscellaneous employees. However, she noted that this is the equivalent of
reducing your mortgage to a 15 year period.
Vice Mayor Colson asked if any jurisdiction had done a fresh start. Finance Director Augustine stated that
she didn’t believe so.
Vice Mayor Colson stated that unlike a mortgage, the pension liability is fluctuating. Therefore she was not
in favor a fresh start.
Councilmember Beach asked if the City has the ability to use Section 115 Trust funds to make larger
payments now. Finance Director Augustine replied in the affirmative.
Finance Director Augustine next discussed OPEB liabilities, which are the other post-employment benefits.
She explained that OPEB liabilities consist of health care plan premiums, CalPERS health plan minimum,
and health reimbursement arrangements. She noted that total liabilities are $53 million, and there is $14.1
million set aside in a trust fund. Therefore, the unfunded OPEB liabilities are $38.9 million.
Finance Director Augustine stated that there are a lot of ways that OPEB liabilities are similar to pension
liabilities:
1. Require an actuarial study
2. Annual contributions go toward: service costs and unfunded accrued liability
3. Benefits reduced in past 5-10 years.
She noted that the ways that are different is that OPEB liabilities are:
1. Pay-as-you-go until 2013-14
2. Administered by the City
3. No employee contributions
Finance Director Augustine reviewed the OPEB funded status projection, which shows the City will be fully
funded by 2035 and after that will only have to pay the service costs. She noted that the major takeaway is
that OPEB funding has been made systematic, and unless something changes, it will be staff’s
recommendation to stay the course.
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Vice Mayor Colson asked what the City is paying on pension obligation bonds. Finance Director Augustine
stated 5.5%.
Vice Mayor Colson stated that the City could accelerate the payment of the pension obligation bonds if
interest rates become inverted. She explained that she liked what the City was doing with the Section 115
Trust Fund.
Vice Mayor Colson asked that staff stay abreast of the California Rule case heading to the California
Supreme Court. Finance Director Augustine replied in the affirmative.
Finance Director Augustine stated that staff would come back with recommendations at the Mid-Year
Budget Study Session.
Mayor Brownrigg stated that as the new employee MOUs are created, it is important the City discuss these
issues at those negotiations. Finance Director Augustine agreed.
Mayor Brownrigg thanked staff for the presentation.
11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS
a. VICE MAYOR COLSON’S COMMITTEE REPORT
b. COUNCILMEMBER BEACH’S COMMITTEE REPORT
12. FUTURE AGENDA ITEMS
There were no future agenda items.
13. ACKNOWLEDGEMENTS
The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Parking & Safety
Commission, Beautification Commission, Parks and Recreation Commission and Library Board of Trustees
are available online at www.burlingame.org.
14. ADJOURNMENT
Mayor Brownrigg adjourned meeting at 10:21 p.m.
Respectfully submitted,
/s/
Meaghan Hassel-Shearer
City Clerk